Journal of Service Management

Emerald Article: The emergence of the new service marketing: Nordic School
perspectives
Evert Gummesson, Christian Grönroos

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To cite this document: Evert Gummesson, Christian Grönroos, (2012),"The emergence of the new service marketing: Nordic School
perspectives", Journal of Service Management, Vol. 23 Iss: 4 pp. 479 - 497
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The new service

The emergence of the new service marketing
marketing: Nordic School
perspectives
479
Evert Gummesson
Stockholm University School of Business, Stockholm, Sweden, and Received 30 January 2012
Christian Grönroos Revised 23 February 2012
Accepted 15 March 2012
Hanken School of Economics, Helsinki, Finland

Abstract
Purpose – The purpose of this paper is to offer a reflective account of the emergence of new
marketing theory as seen through the lens of the Nordic School of Service.
Design/methodology/approach – The paper is based on documents and the authors’ self-lived
history and current involvement (“management action research”).
Findings – Northern European scholars, especially from Finland and Sweden, have felt free to design
their own theory, at the same time collaborating internationally. Contributions include an early alert to
services and business-to-business (B2B) marketing being neglected; dissatisfaction with service quality;
that the service economy is more than the service sector; and the insight that relationship marketing and
many-to-many network marketing better represent service reality. A novel service logic abandoning the
divisive goods/services, B2B/B2C (business-to-consumer), and supplier/customer categories, based on
commonalities and interdependencies is arriving. Nordic School methodology is characterised by
induction, case study research, and theory generation, to better address complexity and ambiguity in
favour of validity and relevance. In the 2000s, the synthesis provided by service-dominant (S-D) logic,
IBM’s service science, and network and systems theory have inspired a lively international dialogue.
Research limitations/implications – The hegemony of the marketing management of
mass-manufactured consumer goods was challenged when services entered the marketing agenda
in the 1970s. During the 1980s and 1990s the differences been goods marketing and service marketing
were explored and the understanding for relationships, networks and interaction developed. It
gradually laid the ground for the integrated goods/services approach that is now the major challenge
for service researchers and practitioners alike.
Originality/value – It is unfortunate if developments of marketing in the USA are perceived as a
universal standard for marketing. By studying contributions from many cultures and nations in other
countries the paper enhances the understanding of the diversity of marketing. This article presents
such a case from Northern Europe.
Keywords Nordic School, Marketing theory, Marketing, Service, Relational approaches, Finland,
Sweden, Northern Europe
Paper type Research paper

Introduction
We got the idea to the designation Nordic School of Service from two previous schools of
thought. The Copenhagen School developed “the parameter theory” as an extension of
microeconomics in which price is the single market-regulating parameter. The new
theory added quality, service, and advertising through which sellers could also influence Journal of Service Management
Vol. 23 No. 4, 2012
markets (Rasmussen, 1955; Mickwitz, 1959). The Stockholm School (1930s-1970s) pp. 479-497
q Emerald Group Publishing Limited
embraced internationally reputed Swedish economists, among them the Nobel 1757-5818
Laureates in Economic Sciences Gunnar Myrdal and Bertil Ohlin and the former DOI 10.1108/09564231211260387
JOSM Secretary-General of the United Nations, Dag Hammarskjöld, winner of the Nobel Peace
23,4 Prize. It was not a uniform group but its members worked creatively to adapt economics
to reality (Nycander, 2005). We thought a brand could also be supportive in making
Nordic service research more visible internationally.
The interest in services marketing began in the 1970s in several countries
simultaneously. Services were absent in management and business disciplines despite
480 official statistics telling us that services constituted the largest economic sector in
developed economies. The dominating marketing management and mix approaches built
on experience and research of mass manufactured and mass distributed consumer goods.
Service as a specific type of economic activity now entered the business school agenda.
In Northern Europe Christian Grönroos, Evert Gummesson and Richard Normann
were the most active early advocates for service. Grönroos and Gummesson with a
background in marketing developed concepts and models with both similarities and
differences. They saw the Nordic School as a supportive community with service as the
unifying topic allowing its voluntary members to find their own way. Normann came
from corporate strategy and organization theory. Although he did not use the Nordic
School brand, the fact that all of us appeared at the same time with similar ideas and with
the open definition of the Nordic School, we have chosen to include his contributions in
this article. Many of his disciples work with us; academically most notable is Kaj
Storbacka whose publications (Storbacka et al., 1994) are used in classrooms and research.
A parallel renunciation of consumer goods marketing management in favour of
relational approaches occurred in business-to-business (B2B) marketing. At Uppsala
University, Sweden, it gave birth to the Industrial Marketing and Purchasing (IMP)
Group. Its subject is not specifically service but IMP members have provided ideas to
service development through their studies of relationships, networks and interaction
(see overview in Håkansson et al., 2009).
The article proceeds to discuss the past, present and future of marketing with the
conviction that theory developments are as much the story of individuals and
institutions as of the empirical and conceptual research contributions. We then present
the work of early key actors and major research institutes; sum up Nordic School
approaches and contributions; and end with reflections of the value and progress of
service marketing.

Studying the past, present and future of marketing

With few exceptions it is not feasible to foresee the future although forecasts can be more
or less qualified. History on the other hand may sound easy; is not it just to record
the past? We must be aware that even the past is only partially traceable with all its
people, institutions, networks, events, ideas and contributions. We cannot overview it
all; we never have complete and entirely reliable information. Further, the mass of data
has to be conceptualized and interpreted; there is no such thing as an objective
description. In hindsight one may feel compelled to present a rational and streamlined
pattern and appealing but usually premature generalizations. Our strategy is to be
reflective and accept real world complexity and ambiguity, and to enter into constructive
dialogue with others.
Marketing history is usually presented just as the concepts, theories and philosophies
of those who contributed. In our view all efforts to objectify and conceptualize without
considering the people behind it are inadequate. The researcher is the most important
research instrument and all application of research is guided by individual persona and The new service
the persona of the “researchscape”, the context within which an individual acts. marketing
The history of “general” marketing as presented in the English-speaking literature is
invariably the US history (Bartels, 1976; Sheth et al., 1988). When it comes to the history
of specific developments that is also usually the case, for example Sheth and Parvatiyar
(1995) on the history of relationship marketing. Although the term marketing has been
adopted in its English version or literally translated to other languages, exchange 481
through trade and commerce is thousands of years old. One could object that this is not
modern marketing. No, because the marketing context – society, markets, technology –
was different but the principles are essentially the same. Contributions to marketing
come from researchers and practitioners from many parts of the world. The variation
may be substantial although mainstream US marketing is so widely exposed through
textbooks and certain journals that it obscures other contributions and seems to
discourage scholars in many countries to trust their own minds and environment as the
basis for theory development.
Service marketing history is presented with more international awareness (Berry and
Parasuraman, 1993; Fisk et al., 1993, 2000). Further, there are articles that start with
Greek philosophers 400 years BC, and proceed to Scotsman Adam Smith (1723-1790),
Frenchman Jean-Baptiste Say (1776-1832), German Karl Marx (1818-1883) and so on
(Delaunay and Gadrey, 1992; Grönroos, 1994a; Lovelock and Gummesson, 2004;
Vargo and Lusch, 2008b).
When service was highlighted in research in the 1970s this rapidly gave birth to a
critical mass of researchers from many universities. The hegemony of the marketing
management of mass-produced and mass-distributed consumer goods was challenged
and a relational approach to marketing in general became wide-spread. Service firms
and government organizations began to understand the need for service marketing and
management. Both together with researchers and on their own, practitioners developed
new strategies. Despite this progress, the findings have not been properly integrated
into a more valid general marketing theory. Further theory generation and practical
application is imperative.
Although there are similarities between countries there are also differences both in
markets, culture, business practice, theory development, and marketing education, and
national languages make the marketing history inaccessible internationally.
By studying the development of marketing in many cultures we enhance the
understanding of diversity and the different contributions. This article presents such a
case from Northern Europe. The approach and the results from the Nordic School are in
part original with the recognition of influences from international collaboration.
Marketing theory had its roots in microeconomics where price is the core variable; it
is often called price theory. It goes back to Swiss mathematician Nicolas Bernoulli
(1695-1726) and his interest in the consumers’ buying decisions. Adam Smith is
credited with the idea that “the invisible hand” and the self-interests of the free market,
embodied by “the economic men”, make markets frictionless and instantly adaptable.
But this is unfair to Smith; he was not as simple-minded as that. Such free markets do
not exist, yet they form the foundation of microeconomic theory and have turned
it into a mere theory of anomalies. In reality the “hand” belongs to visible and invisible
individuals, organizations and networks that consciously manipulate and manage
markets. Microeconomics seeks an exit form its dilemma by introducing
JOSM various “explanations”, primarily by applying theories from psychology. This goes
23,4 under the name of behavioral economics but is still committed to forcing data into the
costume of price theory thus superimposing unrealistic restrictions to future
developments. Microeconomists do not cite research in marketing; they probably do
not even know about it. The marketing discipline used to refer to economics but during
the past 50 years the references have practically disappeared. The reason is simple;
482 economics has little to offer.
The textbooks of marketing, which influence the attitudes of young students in their
formative years, are still structured around marketing mix theory from the 1960s. The
40 years of developments have gone unnoticed and not generated more inclusive and
general theory. This is unfortunate but intriguing and cannot be explained
intellectually; it has to do with power, recognition, money and other aspects that
should ideally not control what is meant to be a scholarly environment.
In their article on the history of services marketing, Fisk et al. (1993) identified three
stages: crawling out (pre-1980); scurrying about (1980-1985); and walking erect (1985-)
thus having reached maturity and recognition as a subdiscipline of “general”
marketing. The stages stood out as reasonable at the time. But maturity is not a stable
state; in nature it is superseded by decline, death and rebirth. Now being able to draw
on a further two decades, we would like to offer a revised classification, defined by
three paradigms: the goods paradigm (pre-1970s); the services vs goods paradigm with
focus on differences (1970s-2000s); and the service paradigm based on goods/services
integration and interdependency (2000s-). Such chronological classifications are merely
rough efforts to facilitate the interpretation of ongoing changes. The changes are
non-linear; they do not appear simultaneously in all contexts; and they may be in
progress for a long time before they become part and parcel of the mainstream.
During the past decades the Nordic School has pointed to many of the conclusions
that now form the 2000s integrative service paradigm. They are recognized in
service-dominant (S-D) logic introduced by Vargo and Lusch (2004, 2008a, b). S-D logic
has inspired researchers globally by its synthesis of marketing and management based
on a stakeholder-centric definition of service as an all inclusive concept for a firm’s
output, the value proposition, thus dissolving the goods/service divide (for overviews,
see Gummesson, 2007; Gummesson et al., 2010; Mele and Polese, 2011). Among other
concepts that have raised the most interest are co-creation of value and service, and
integration of resources between stakeholders giving an active (operant) role to
customers. In the 2000s, IBM introduced its long-term service science research program
with its orientation towards practice. IBM was once an acronym for International
Business Machines, but IBM has kept shifting its business mission from office machines
to data processing to computer science and in the 2000s began the journey towards
service science. IBM researchers identified that service systems in society are often
inefficient from the customer’s and citizen’s perspective and are not sufficiently
innovative. Service science sees society as a network of service systems and has
launched the slogan “Create a Smarter Planet” (Spohrer et al., 2007; Maglio and
Spohrer, 2008; Maglio et al., 2010). In these efforts the necessity to address complexity
and to use network and systems theory are recognized as well as special applications
such as those from the IMP Group, many-to-many marketing (Gummesson, 2006, 2008)
and the viable systems approach (Barile and Polese, 2010). A rich literature has followed
in the wake of these contributions. These ongoing developments form the “3 Pillars”
of the biennial Naples Forum on Service, first held in Italy in 2009. Although the basic The new service
ideas of S-D logic are widely accepted, criticism towards aspects of its premises and marketing
some of its conclusions has been voiced, also by Nordic School scholars (Heinonen et al.,
2010; Grönroos, 2011; Grönroos and Ravald, 2011).

Nordic School actors and institutions

Covering a period from the 1970s up to 2012, the article is based on our self-lived 483
history of marketing and service and our current involvement. We have used the
methodology of “management action research” (Gummesson, 2000, 2012) where the
actors are also the researchers, continuously reflecting on what has happened and what
is in progress. The great advantage of action research is the privileged and first-hand
access to focal phenomena. It is subjective and personal but is open to alternative
interpretations. We realized that giving a full and balanced account of all contributors
and contributions to service research from the Nordic countries was beyond our
capacity; the risk of bias was too big. So the strategy became: Let’s write about what
we know best, and let’s try to lift it beyond mere description.
Although working independently, Nordic School affiliates are diligent participants
in and organizers of international conferences; they utilize references and research
results from around the world; and write articles in international journals. They have
also strived to bridge the gap between academe and practice through cooperation with
business firms and government organizations. The next section introduce the pioneers
of the Nordic School and the main institutes which have been established. They include
Grönroos, Gummesson and Normann (in alphabetical order) who all began in the
1970s, followed by Edvardsson a decade later.

Christian Grönroos, Centre for Relationship Marketing and Service Management

(CERS), Hanken School of Economics, Finland
Gösta Mickwitz, professor at Hanken School of Economics, Finland, and member of the
Copenhagen School, appointed Grönroos as teaching assistant in 1971. In 1976
Grönroos took an interest in the marketing challenges for service firms and in 1979
defended his PhD thesis on service marketing. For ten years the thesis was used as a
textbook in the Nordic countries. Through empirical case study research he showed
that traditional consumer goods-based marketing concepts and models did not fit
services. He distinguished between a traditional marketing function, including
conventional marketing mix tools, and an interactive marketing function that relates to
the interactions between firms and their customers. This also made him aware of the
importance of preparing employees working in the customer interface not only for
doing their job well in a technical sense, but also for dealing with customers in a
service-oriented way. This required internal marketing, a new concept at the time also
simultaneously introduced in France and North America (for a synthesis, see
Ballantyne, 2004). He divided marketing into a traditional, external marketing
process, an interactive marketing process, and an internal marketing process
(Grönroos, 1978, 1982). He also realized that service firms do not have products in the
conventional consumer goods fashion; the equivalent of the product is an interactive
process and its outcome. This led to a model of perceived service quality
(Grönroos, 1984) with two fundamental elements, namely functional quality relating
to the process aspect of service, and the technical quality relating to the outcome.
JOSM As a third element he included an image factor, filtering the perceptions of the service
23,4 process and its outcome, and adding a dynamic aspect to the otherwise static model.
He soon realized the importance to break free from marketing’s conventional
borders, thus integrating a marketing or customer focus with the tasks of all business
functions. To emphasize the cross-functional market-oriented management aspect of
service marketing he suggested that service management is a more appropriate term
484 than service marketing (Grönroos, 1990).
In the late 1980s and 1990s he extensively argued for the relational aspects of
service marketing, and demonstrated that relationship marketing is depending on a
service perspective. In the highly cited articles “From marketing mix to relationship
marketing” and “Quo Vadis, marketing? Toward a relationship marketing paradigm”
(Grönroos, 1994a, b) he advocated a cross-functional approach to relationship
marketing and stressing the important role of value in relationship marketing
(Ravald and Grönroos, 1996). In a later article (Grönroos, 1999), he went as far as to
suggest that the term marketing is too restrictive and one-dimensional to be useful.
Rather it blocks an organization from becoming service and relationship orientated.
In the 2000s he has been involved in studying service productivity (Grönroos and
Ojasalo, 2004), mutual value creation and how manufacturing firms can become service
businesses (Grönroos and Helle, 2010), reciprocal return on relationships (Grönroos and
Helle, 2012), marketing theory and promise management (Grönroos, 2006b, 2009),
and in contributing to a logical development of a service perspective on marketing and
business (Grönroos, 2006a, c).
At his alma mater, Hanken School of Economics, Grönroos became professor of
marketing in 1984. Following his initiative Hanken established the CERS in1994 with him
as its first chairperson. He stepped down from this position in 2010 and his former PhD
student Kristina Heinonen took over as chair and executive director. Research within CERS
includes a vast array of topics with service and relationships as a common denominator.
For several years, successful firms in Finland were honored by CERS with an award for
excellence in relationship marketing and management. In 2010 CERS and the Marketing
Department of Hanken established the Grönroos Service Research Award to be annually
presented to an internationally acclaimed researcher who has produced outstanding
research challenging common understanding and demonstrating significant originality.
Tore Strandvik’s interest in service marketing was triggered when in the late 1980s he
and his colleague Veronica Liljander decided to challenge the perceived service quality
model. Subsequently Strandvik did his PhD on service quality and as professor of
marketing continued his work on service and relationship topics (Storbacka et al., 1994;
Edvardsson and Strandvik, 2009; Strandvik and Holmlund, 2008; Heinonen and
Strandvik, 2009). Strandvik was at one time executive director of CERS and is now a
board member of both CERS and Centrum för tjänsteforskning (CTF) (see further below),
one of the many examples of the close cooperation between Finland and Sweden. His
research has continued to challenge what he considers a lack of true customer centricity in
service and relationship research, and even in the new emerging service perspective. For
example, Strandvik with his colleague Maria Holmlund-Rytkönen and Bo Edvardsson,
have criticized the offering concept as firm centric and argued for “a customer-based
needing concept” (Strandvik et al., 2012). Together with a research group he has
developed the notion of a customer-based dominant logic for marketing as a complement
or even a replacement of the service perspective (Heinonen et al., 2010).
Evert Gummesson, Stockholm University School of Business, Sweden The new service
After graduation Gummesson planned a career as marketing practitioner. His attention marketing
was drawn to service when moving from consumer goods to an international
management consulting firm. Its marketing of consulting services was highly successful
but did not follow marketing textbook recommendations. This observation resulted in
articles, books, and a PhD thesis presented at Stockholm University in 1977. In his thesis
the marketing and purchasing practices of 20 professional B2B service firms 485
were compared with marketing theory. He found that neither services nor B2B were
but marginally noted in the literature although they constituted the major share of
all marketing expense. Marketing textbooks were based on US data and experiences
from mass consumer goods but was presented as generally valid. He found that the
core of the marketing of professional services was interaction in networks of
relationships both in the market and inside the firm; that credibility and reputation built
on performance in assignments; that word-of-mouth and the initiatives of individual
consultants were the keys to sales (what he later refers to as “part-time marketers”);
that it was hard even in retrospect to measure the quality of a professional service; and
that the marketing literature did not address quality (later extended to the
quality-productivity-profitability interdependency; Gummesson, 1998). The findings
were published in several international papers (Gummesson, 1976, 1978, 1979, 1981a, b).
As consumer goods marketing theory did not match the marketing of services and
B2B it was natural to look at these as different. It was vital to study them inductively,
letting theory emerge from the data and not forcing data into extant theory. It struck
Gummesson that service research and IMP arrived at similar results, which he
condensed to the concepts of relationships, networks and interaction. He suggested a
synthesis – a new concept of marketing – of IMP research and service research in 1983
at two European conferences (Gummesson, 1985; Grönroos and Gummesson, 1985).
Through continuous assignments at Ericsson he got deeper into B2B and the
currently topical issue of the services of manufacturing companies. He found that selling
telecom systems meant building long-term relationships with customers and networks
of other suppliers, and close cooperation between design, engineering and
manufacturing. But equally important were the service provided by preventive
maintenance, repair, access to spare parts and professional advice, financial solutions,
the training of customer staff, and the provision of software upgrades. This is claimed to
be a new issue in the 2000s but it was long established even before the 1980s. However,
the problem has not yet been solved. Unfortunately the current interest in the topic
mainly seeks solutions in the pre-2000s paradigm built on the goods/service divide.
In 1986 he became part-time professor at Gothenburg University and Karlstad
University in connection with the founding of the CTF. On the initiative of Professor
Solveig Wikström he was offered a chair on service management at Stockholm
University. He hesitated, afraid that the academic culture would distance him from
the reality of the business world. In the 1990s universities and professors were freer
to design their work than they are today and a reasonable solution was found. At its
School of Business, the biggest in Sweden, the departments were not silos but made
cross-disciplinary work possible. Gummesson worked to make services everybody’s
concern and not just a marketing issue. Service became the subject of PhD dissertations,
and courses were introduced. Emeritus professor since 2002, he is still part of Stockholm
JOSM University and working in close contact with CERS, CTF, Tampere University (Finland)
23,4 and an extensive international network.
In the late 1980s relational approaches to marketing began to be generalized beyond
the services/goods and B2B/business-to-consumer (B2C) divides. They became
conceptualized as relationship marketing, customer relationship management (CRM)
and one-to-one marketing. The idea was that long-term customer-supplier relationships
486 are more effective than single transactions which were the prime object of marketing
management. To make relationship marketing more actionable, Gummesson (1987)
defined concrete relationships that later became 30, the 30Rs, thus paraphrasing the
4P model. His book in Swedish in 1995 became an immediate bestseller and is published
in English as Total Relationship Marketing (Gummesson, 2008).
For Gummesson, networks gradually stood out as the overriding concept resting on
the legs of interaction and relationships (Gummesson, 2006, 2008). Many-to-many
marketing is a network approach that integrates lessons from service marketing, the
IMP B2B approach, and relationship marketing. Whereas one-to-one draws the
attention to individual customers in dyadic relationships, many-to-many
acknowledges all stakeholders in marketing situations. It takes relational properties
in the direction of a general marketing and management theory, linking B2B, B2C and
customer-to-customer (C2C) interaction, further explained in Gummesson and Polese
(2009). This thinking and much of what the Nordic School had contributed over many
years found further support in S-D logic and IBM’s service science program.
Disgruntled by the slowness of the acceptance of new developments he published a
critical review of approaches to service quality (Gummesson, 1993) and in an article
objected to inadequate distinctions between goods and services (Lovelock and
Gummesson, 2004). In 2009, he co-founded the biennial Naples Forum on Service with
Italian professors Cristina Mele and Francesco Polese supported by the fathers of S-D
logic Bob Lusch and Steve Vargo and the leader of the IBM service science program Jim
Spohrer. As recognition for his work with the Forum the Evert Gummesson Advanced
Research Award was instituted in Italy in 2011 and he became the first recipient of the
S-D Logic Award.

Richard Normann, Service Management Group (SMG)

After his PhD in 1975 Normann worked as a management consultant and in 1980
founded the SMG. During many years SMG became the leader in service consultancy.
An internationally oriented Swede he took up residence in Paris with the bulk of his
clients in Sweden and Finland but also in the USA, Italy and other countries. At times
he was guest researcher at Harvard Business School, and guest professor at the
Copenhagen Business School, Denmark, and Lund University, Sweden. He was the
epitome of a thinker and high achiever but sadly died of cancer in 2003 at the age of 60.
Marketing had positioned itself in the core of service research but recognized that
services were closely interwoven with general management and other functions.
Normann’s (1984, 2001) book Service Management (3rd edition) became an
internationally recognized book which made the term service management known. He
introduced the metaphor of “the moment of truth”, referring to the customer-provider
service encounter and interaction. Normann’s vocabulary was somewhat different from
that of the Nordic School, and although his point of departure was corporate strategy,
organization theory and management, the content and the ideas were similar.
 Gummesson and Grönroos stayed in contact with Normann, but he preferred to The new service
concentrate on consultancy and rarely attended an academic conference or wrote an marketing
article. An exception is the comprehensive article with Normann and Ramirez (1993) in
Harvard Business Review, “From value chain to value constellation: designing
interactive strategy”. It was a milestone in the conceptualization of their service logic,
tied to the IKEA case. Normann’s (2001) last book, Reframing Business is a synthesis of
his life-long learning and also his last will and testament to the academic and business 487
communities. A tribute to Normann’s contributions and their affinity to recent
international developments in service is found in Michel et al. (2008).

Bo Edvardsson, CTF Service Research Center, Karlstad University, Sweden

In the early 1980s Bo Edvardsson became assistant professor at Karlstad University
College, at that time an affiliation of Gothenburg University. He had a PhD from
Uppsala University on new product development and observed that companies often
expressed a desire to develop new and better services. His seminars on the service
economy created considerable interest, also in the media. Encouraged by international
contacts, especially the First Interstate Center for Services Marketing, now the Center
for Services Leadership, Arizona State University, and with the support of the Karlstad
Vice Chancellor Lennart Andersson he took the initiative to a service research center in
Sweden. He raised the interest of others; particularly the entrepreneur and service firm
executive Leif Magnusson. Karlstad University, as it later became, was looking for
profiling opportunities and The Service Research Center (CTF) was founded in 1986
with Gummesson as its first professor and Edvardsson as its director.
The first tasks were to find a strategy, establish research and education programs
and gain credibility in the academic world. Instead of trying to first establish credibility
in Sweden, why not follow a leapfrogging strategy skipping the local stage and go
directly to the international community? During ten years Gummesson had built an
international network of service pioneers, among them Len Berry, Mary Jo Bitner, Steve
Brown, Pierre Eiglier, Bill George, Eric Langeard, Chris Lovelock, Parsu Parasuraman
and Lynn Shostack. Going international from the start was a lucky move.
In the 1980s quality management had moved from manufacturing to embrace all
functions of an organization, services and customers. CTF dedicated its early research
to service quality. It led to the establishment of the Quality in Service Symposium,
QUIS (now the International Research Symposium on Service Excellence in
Management). CTF teamed up with the Center for Services Leadership and its
director Steve Brown. QUIS1 was held in Karlstad in 1988 and QUIS2 in the USA,
co-hosted by Professor Eb Scheuing, St John’s University, New York, and the telecom
company GTE. QUIS has since taken place biennially alternating between Sweden, the
USA and other countries.
Edvardsson built a team of researchers, among them Anders Gustafsson. He has
stayed on as its director, today together with Professor Patrik Larsson. CTF researchers
have become prolific writes of articles, book chapters and books. Among those who have
studied marketing-related issues are Bo Enquist, Margareta Friman, Per Kristensson,
Per Skålén, Inger Roos, Bård Tronvoll and Lars Witell (Edvardsson and Roos, 2003;
Roos et al., 2008; Edvardsson and Enquist, 2009; Skålén, 2010; Witell et al., 2011).
CTF is especially known for research in service development and innovation. In a
frequently cited article by Edvardsson (1997), key concepts of new service development
JOSM are presented. Customer involvement in the development process and observations of
23,4 customers in real action is the theme of an article in Technovation (Edvardsson et al., 2012)
where an overview of methods for customer integration is provided, supported by
empirical studies (Edvardsson et al., 2000, 2006; Kristensson et al., 2004; Magnusson, 2009).
An often referred to article, “Service portraits in service research”, discusses
service as a perspective on value creation rather than a category of market offerings
488 (Edvardsson et al., 2005). The focus is on the outcome of a co-creation process in
which customers and other actors play a key role and value is socially constructed.
This is further developed in Edvardsson et al. (2011) where the authors argue that a
service system is embedded in a social system. The authors contend that value should
be understood as value-in-social-context and as a social construction.
One of the key focus areas for CTF has been customer satisfaction. Especially
Anders Gustafsson has established a long research relationship with the National
Quality Research Center at the University of Michigan Business School. In this
research stream the focus has been on the national satisfaction indices and how to
develop these ( Johnson et al., 2001, 2002), how to measure and estimate customer
satisfaction models (Gustafsson and Johnson, 2004), and linking satisfaction to
different types of behavior (Gustafsson et al., 2005).
The Service and Market Oriented Transportation is a ten year program for the
transportation sector in Sweden. Critical incidents in customer relationships, customer
switching, and complaints and loyalty have received much attention in CTF’s research
(Edvardsson and Strandvik, 2000, 2009). CTF researchers are actively engaged in the
current developments of the new service paradigm and cooperate closely with S-D logic
and service science researchers. Other areas of research are customer experiences,
employee relationships in service organizations, customer loyalty and relationship
dynamics, service business models and the transition from products to service in
manufacturing companies (Gebauer et al., 2010, 2011) and customer relationship dynamics.
CTF is now a leading international center with a current research staff close to 60. It
works with universities around the globe and with businesses and government
organizations. Among its important partners are IKEA, Volvo, Ericsson, Telia and
SKF. An extensive network of 25 research centers around the world, the International
Academy of Services Research and Education is managed by CTF. Every year CTF
organizes the Service Academy where cutting edge research is presented in
cooperation with business. In 2011 CTF could celebrate its 25th anniversary with
seminars and international guest speakers.

Other researchers
The interest for service spread quickly in Finland and Sweden and soon became an
established research field and subject for courses. The two research centers that were
established are among the biggest internationally, but we should be reminded that much
is going on in smaller groups and among individuals in practically all business schools in
Sweden and Finland. Taken together this is impressive. It is only the size of this article that
prevents us from going deeper into other contributions and what is currently going on.

Practitioner connections
At an early stage Grönroos went on the speaker’s circuit in Sweden and Finland
with presentations of the new service thinking among universities, businesses and the
government sector, and Normann worked through his consulting company. Gummesson The new service
worked more broadly with marketing issues, especially through consultancy and marketing
education dealing with service in B2B. Edvardsson related to practice through
presentations and consultancy. Others like Leif Edvinsson, Jarmo Lehtinen, Lars-Johan
Lindqvist, Inger Roos, Tore Strandvik and Solveig Wikström also worked closely with
the business and government sectors.
In 1974 the Marketing Technology Center, MTC, was formed in Sweden as a broker 489
between researcher and practitioners interests. It first director, Dr Rolf Back, took an early
interest in service and supported Gummesson’s and Grönroos’ research. After 40 years
MTC is still actively engaged in promoting the practical application of service research.
A breakthrough for practitioners in both business and government occurred when
Jan Carlzon became the CEO of Scandinavian Airlines (SAS) in 1981. Through Carlzon’s
charismatic personality SAS and its reconstruction got extensive international media
exposure and inspired academic research. He had learnt from two previous CEO positions
in the travel sector that the customer was set aside. SAS at that time – like most airlines –
saw aircraft and employee administration as its core activity and passengers as
disturbances. Carlzon launched the slogan “Customer in Focus” and stated that positive
interaction between SAS staff and customers was critical for success. He established
two-day service training sessions for all staff; flattened the organization; and made
structural changes in timetables, destinations, and fares. At the time his efforts rescued
SAS. In Carlzon’s (1987) heydays SAS became internationally copied and a few years later
his book Moments of Truth, today ranked as one of the 100 most important leadership
books, communicated his philosophy to a broad audience. Interviewed 25 years later,
Carlzon maintains that the message is just as topical today.
Jan Wallander, a prominent Swedish economist and researcher who became
managing director of a regional bank and later of the major bank Handelsbanken, also
had an impact on service thinking and practice. He made many changes in the bank’s
operations, among them focusing on customer relationships and improved service. His
management philosophy is documented in several books, especially one where he
emphasizes the need to manage a service business in tune with human nature, and not
against it (Wallander, 2002; only published in Swedish).
In 1985 the Coalition of Service Industries (Tjänsteförbundet) was founded in Sweden
by major service companies and was active during a ten-year period. Its mission was to
make society aware of the service economy through extensive lobbying to politicians,
the media and others, and to support service research and education. Mainstream
political thinking was still based on industrial era conditions, and unfortunately obsolete
official statistics and economics theories are still conceptually rooted in this era.
Has service research had an effect on service practice and has practitioner interest
in service been significant and sustaining? This impact is impossible to measure
quantitatively as there is too much variety among firms and cultures and marketing has
adapted to changing customer needs and wants and the new infrastructure of the
internet and mobile communication. In recent years finance and shareholder value has
been in focus and the customer has been sent to the background. Especially the
long-term financial world crisis that started in 2008 has shown that the financial sector
has misused customer trust with the purpose of maximizing short-term profits.
Service research has extensively dealt with satisfaction surveys but the major issues of
value creation to the benefit of consumers, businesses, governments and society at large
JOSM have been absent. Therefore, the long-term commitment from IBM to develop service
23,4 science in cooperation with currently over 500 business schools and schools of
technology from all parts of the world is especially welcomed.

Nordic School research in summary

Nordic School research approaches and contributions have been presented in the text.
490 They are further found in the references although the reference list only covers a
small portion of what has been published. Here is a summary of essentials of
Nordic School thinking (Grönroos and Gummesson, 1985, pp. 6-8; Grönroos, 2007, pp. 5-6):
.
In the 2000s, we are progressing towards a new science (or logic) of service as
value-creation abandoning the production-centric goods manufacturing versus a
service sector divide. This issue has been raised by the Nordic School over the
decades.
.
Conceptual work and thinking out-of-the-box are key characteristics of the Nordic
School. Research is not constrained by mainstream norms regarding what
marketing is or what makes research scientific. The research is oriented towards
case study research, action research and other interactive and interpretive
methods, but quantitative methods like surveys are used when appropriate.
.
Theory generation is considered more important to the development of a discipline
and not just as an antecedent to hypotheses-testing. Constant comparison between
new and existing theory, keeping the winner and discarding the loser, is a
productive way of evaluating theory. In certain instances traditional theory
testing has also been found useful.
.
Initially service marketing research was normative and pragmatic but is
increasingly striving to offer both basic and applied research.
.
Alleged service characteristics used in the 1980s and 1990s – intangibility, etc. –
have proved to be invalid to define goods and services as overriding economic
categories. They are only some of numerous dimensions that can help define any
offering or marketing situation.
.
Services and service should not be defined as a goods anomaly but as something
in its own right, representing a perspective and certain aspects on marketing.
Service and goods should always be addressed as interdependent. In fact goods
have never been properly defined, and manufactured goods are also the outcome
of processes, although the consumer is rarely present.
.
The concepts of the service economy and service competition were syntheses of
goods, services and other input to offer service and value to citizens and customers.
.
Making clear that marketing management and mix theory could not be directly
applied to service as it is rooted in B2C mass marketing and mass manufacturing of
goods. Long-term interactive relationships and networks rather than transactional
exchange are considered the core of research in marketing as well as in marketing
practice.
.
Service management and market-oriented management are more adequate concepts
than service marketing and marketing management. Marketing is not a silo among
silos. The concept of internal marketing emerged as a natural consequence of this
integrative approach.
 .
This is supported by the concepts of full-time marketers (those hired as marketing The new service
professionals) and part-time marketers (others who on part of their time influence marketing
a firm’s marketing, among them employees, customers, suppliers, intermediaries
and the media).
.
Service is seen as activities combined into processes. Service processes
(conventionally referred to as service production and delivery) and service
consumption are partly simultaneous processes where customers are active 491
co-producers and concreators.
.
Many characteristics of service marketing align with the B2B research done by the
IMP Group and where the active role of customers is emphasized together with
network thinking. Nordic School research has here benefitted from this.
.
Relationship marketing, CRM, one-to-one and later many-to-many marketing could
be referred to the three core variables of relationships, networks and interaction.
.
C2C interaction has become a major element of marketing expedited by the new
infrastructure of the internet, mobile communication and social media.

The general difference between the Nordic School approach to service research and
mainstream, mainly US-led approaches, is shown in Figure 1. When mainstream
research has taken existing marketing models and concepts, such as the marketing
mix, market segmentation and marketing planning as a starting point, the Nordic school
approach is different. Its starting point is service as a phenomenon in its marketing
context. When mainstream research asks how service fit into existing marketing models,
Nordic school research asks how concepts and models that support the understanding of
service marketing should look like.

Progress but also disappointments: last minute reflections

Going back to Nordic School contributions from the 1970s and 1980s and also to
other early contributions from other countries, it is baffling to see how much of what is
now presented as new service theory was already there at the time. Although we have

MAINSTREAM APPROACH NORDIC SCHOOL APPROACH

Point of
departure :
Existing body of
marketing knowledge:
-marketing mix
SERVICE
-marketing management
in its marketing
-marketing function
context
-marketing department
-marketing planning
-etc.
Figure 1.
The Nordic School
Research approach to studying
WHAT SHOULD MARKETING CONCEPTS
question : How do services fit in? services compared to the
AND MODELS LOOK LIKE TO FIT IN?
mainstream approach
Source: Grönroos (2007, p. 5)
JOSM had a friendly and in many way productive collaboration with US and other
23,4 non-Nordic researchers, the 1980s and 1990s became dominated by US research. It was
published in widely circulated and recognized US journals which were – and still are –
much more difficult to access for non-US authors, especially as their research approach
often deviates from US business school norms.
Concerns and questions that keep us busy include:
492 .
Has service become better? Numerous traditional service areas are in great
trouble: financial service, health care, local transportation and education just to
mention a few. These are extremely complex networks of service systems – but
also fundamental to the welfare of societies. Does service research address these
issues in any significant way that has a positive impact on markets and nations?
.
Slow acceptance of scholarly contributions and the over-selling of simplistic
studies and techniques at the cost of addressing complexity and emphasizing
service as a perspective. Service marketing has not yet entered the marketing
textbooks but as a special case of the 1960s marketing mix approach.
.
Paradigm shifts in marketing theory occur at a slow pace although it is constantly
advocated that knowledge development and change occur at an increasingly more
rapid rate.
.
Economics and official statistics preserve the centuries’ old but long obsolete
division in the manufacturing, service and agricultural sectors. These are
supplier-centric (employment, cost, revenue) and neglect the customer and actual
consumption. There are no statistics of value-in use.

Is this a story of failure or success? It’s failure in the sense that we cannot really tell if our
research has had any effect on our economies and the welfare of citizens and consumers.
It’s success in the sense that it has helped shape a whole new area of academic research
and probably contributed to the general understanding of the service economy. It has
been clearly sustainable; it is not a fad. But it many ways it seems that we should have
achieved more in four decades.
Why does it take so long to get rid of obsolete and irrelevant concepts and terms in
social sciences when it is so much quicker in technology? The Nordic School has
attempted to expand service marketing in the direction of relationships networks and
interaction taking marketing beyond the one-function approach manifested in the
marketing mix and its 4Ps toolkit.
While earlier research in service marketing was based on differences we have now
entered an era where commonalities and interdependencies are in focus. Recognition
of the importance of theory generation and complexity as typical of market behavior
must increasingly show in future research and in its choice of methodology. The
hegemony of the past millennium is being broken in research – but not in marketing
texts and most service textbooks and only slowly in education. We should learn from
history but not feel restricted by it. The all important strategy is to contribute to a
brighter future. In the third millennium service research has opened with syntheses of
the best of the past and new ideas about further directions. The first priority of the
Nordic School is to contribute in this spirit and in the ways its members find fit.
How come two small nations like Finland and Sweden can make an international
impact as the Nordic School and its service research has done? How come that it has
two of the world’s major research centers of service, and that service thinking is The new service
widespread in all business schools in both countries? It certainly shows that size is only marketing
one dimension that sometimes counts, sometimes does not.
Despite the differences to the US tradition of doing research, a recognition of Nordic
School research is that Grönroos, Gummesson and Edvardsson are the only non-US
scholars out of 18 who (including 2011) have received the American Marketing
Association’s Christopher Lovelock Career Contributions Award (formerly called the 493
Career Contributions to Services Discipline Award). This may be seen as a token of the
importance of international dialogue. Other national and international prizes have also
been bestowed on Nordic service researchers.
We would like to conclude where we started: the past, present and the future are
elusive and can be addressed in many ways. We see this as our humble contribution.
Others are invited to provide their perspectives and interpretations.

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Further reading
Grönroos, C. (2007), Service Marketing and Management, 3rd ed., Wiley, Chichester.

About the authors

Evert Gummesson (PhD, Dr hc) is Emeritus Professor of Marketing and Management at the Stockholm
University School of Business, Sweden. His research interests are marketing as relationships,
networks and interaction; service systems; and research methodology, especially complexity theory.
Evert Gummesson is the corresponding author and can be contacted at: eg@fek.su.se
Dr Christian Grönroos is Professor of Service and Relationship Marketing, Hanken School of
Economics, Helsinki, Finland. He is constantly challenging the mainstream and his research is
centered around the development of marketing and management based on service logic.

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